A central bet for the next three years for banks is the development of operations in retail financing. We are talking about housing and consumer loans, the disbursements of which remain at low levels compared to the period of overdevelopment of the sector in the 2000s, after the country’s entry into the euro.
This is due, according to banking sources, both to the stricter credit criteria that are now used in the evaluation of those interested, and to the low demand from households for the creation of new exposures.
As the same circles say, “currently equity dominates the majority of transactions, both for the purchase of consumer goods and for the acquisition of a home.”
The truth is that disbursements of new loans to households have gradually strengthened since 2016, as the macroeconomic environment improved, confidence recovered and banks strengthened capital and liquidity, following the 2015 ordeal.
Changing trends
However, this momentum was halted in 2022, due to the tightening of monetary policy and the rise of interest rates to the highest levels since the creation of the Eurozone.
The more expensive money, according to bank executives, interrupted upward trends in the growth of retail portfolios.
Reversing them again, the same sources estimate, presupposes the maintenance of growth rates of the Greek economy above 2%, but also the de-escalation of the cost of money.
As they say, “the reduction of the intervention indicators of the ECB, which has already started, but also the further improvement of the rating of the Greek banks by the international rating agencies, will allow the provision of cheaper credits to the real economy”.
Banks are optimistic that both conditions will be satisfied within the coming year, paving the way for an increase in financing to households.
Moreover, the liquidity and capital indicators allow the further opening of the cannula of loans, which for the moment has only been achieved in business credit.
However, according to the plans for the period 2024 – 2026 of the four systemic groups, the development of the business in retail loans is key to achieving the profitability targets.
Business loans may remain at the top of the disbursements, based on the banks’ forecasts, but it is also necessary to strengthen housing and consumer loans, in order for the numbers to come out.
The next moves
In this context, the banks have already implemented their plan to attract households with sufficient incomes.
In particular, in recent months, they have been continuously reducing the interest rates they offer on loans, both housing and consumer.
Their offers also include exemption from application fees or rewards through card reward systems.
At the same time, they attempt to approach those who insist on using their deposits to finance their needs.
In this direction, they have launched preferential loan programs with cash collateral, which ensure very low costs.
Through these the borrowers, keeping their movable property intact, secure very cheap liquidity for any purpose.
For example, recently a systemic group launched a mortgage loan, without a real estate note, but with a deposit guarantee.
Its advantage is that the borrower’s money, when it is committed, earns interest, yielding an annual income, while the process is completed faster and at a lower cost, as the pre-notification of the property is avoided.
In this way, a significant percentage of the financing costs is covered and the overall wealth of the customer increases.
At the same time, banks have launched preferential programs in consumer credit secured by cash or real estate.
A typical example is the recent creation of a new loan from a large bank with a fixed interest rate of 4.5% for the entire repayment period, for amounts up to 100,000 euros.
SOURCE: ot.gr
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